Government in Negotiation Phase with Adani Holdings Over JKIA Expansion, CS Mbadi

NAIROBI, Kenya – The Kenyan government is currently in the negotiation phase with Adani Airport Holdings regarding the proposed upgrade and expansion of Jomo Kenyatta International Airport (JKIA), Treasury Cabinet Secretary John Mbadi confirmed.

The deal, worth an estimated Sh238 billion, is being evaluated through a detailed due diligence process led by key government bodies.

Appearing before the Senate Standing Committee on Roads, Transportation, and Housing, CS Mbadi revealed that the Kenya Airports Authority (KAA), the State Department of Transport, the State Law Office, and the Public-Private Partnership (PPP) Directorate are scrutinizing Adani’s capacity to undertake the massive infrastructure project.

“The project is in the negotiation phase following approval by the PPP Committee at its 47th Ordinary meeting held on August 21, 2024,” said Mbadi.

He further noted that the PPP Act of 2021 mandates due diligence to ensure the private entity involved is free from corruption, financial instability, or any legal prohibitions from participating in such projects.

However, the deal has not been without controversy. The High Court recently suspended the leasing plan and set an October 8 hearing date to address concerns raised by the Kenya Human Rights Commission and the Law Society of Kenya.

Opponents argue that handing over control of Kenya’s most strategic airport to a private entity for 30 years could have far-reaching negative consequences, especially given the secrecy surrounding the negotiations.

Despite these legal hurdles, Adani Airport Holdings submitted a Privately Initiated Proposal (PIP) to KAA in compliance with Section 40(1) of the PPP Act, 2021, initiating the current discussions.

While the proposal is under review, the final decision hinges on the results of the extensive due diligence process currently being undertaken by multiple government agencies.

The government, through this process, aims to establish whether Adani meets all the legal and financial criteria required to participate in the public-private partnership, as outlined in Section 41 of the PPP Act.

The final outcome of the negotiations will depend on whether the ongoing assessments find Adani capable of delivering on its promise of upgrading and expanding one of East Africa’s busiest airports.